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My Mother has a living trust specifying her Grandson that has

Customer Question
taken care of her and...
My Mother has a living trust specifying her Grandson that has taken care of her and her home for the past 17 years is to be able to purchase her home for $80,000. at 1% interest over 10 years. She is worried about Calif. state taxes being increased to current value about $350K and him not being able to keep the home. She is willing to transfer home to him now at no charge if that will save taxes from going up. What would be best way to keep current tax base on home and save on Federal and State income taxes for her Grandson?
Submitted: 8 years ago.Category: Tax
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Answered in 18 minutes by:
12/1/2009
Tax Professional: Mark D, Enrolled Agent replied 8 years ago
Mark D
Mark D, Enrolled Agent
Category: Tax
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Paul,

What county are you in?

Regards,

Mark D
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Customer reply replied 8 years ago
Los Angeles, County
Tax Professional: Mark D, Enrolled Agent replied 8 years ago
Paul,

Last question, are the parents of the grandson deceased?

Regards,

Mark D
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Customer reply replied 8 years ago

Parents of grandson and other children are living. The trust specified for Grandson to get house she will change trust or sell home to grandson in advance of death if necessary. All children are aware of the grandson getting the home and have no objections.

Tax Professional: Mark D, Enrolled Agent replied 8 years ago
Paul,

In order for the property to retained its assessed value, the property would have to be transferred (before or after death) to the grandson's parents as they are alive. Later on, the parents can transfer the property to the grandson. You must be careful are transactions that happen closely together could be seen as a step-transaction and the value would be reassessed. The county gives no particular time frame that is needed to hold the title, so this one is tricky. However, to answer you original question, no direct transfer between your mother and the grandchild would be exempt from reassessment since the parents are not deceased. Please let me know if you have any questions.

Regards,

Mark D
Mark D
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